HNI Corporation (HNI) Bundle
A Brief History of HNI Corporation
Company Overview
HNI Corporation is a leading provider of workplace furnishings and residential building products, headquartered in Muscatine, Iowa. The company operates through two primary segments: Workplace Furnishings and Residential Building Products. As of 2024, HNI Corporation has undergone significant changes, including acquisitions and divestitures aimed at enhancing its market position.
Recent Financial Performance
For the third quarter of 2024, HNI Corporation reported consolidated net sales of $672.2 million, a decrease of 5.5% compared to the same quarter in 2023, which recorded net sales of $711.6 million. The decline was attributed to lower sales in both the Workplace Furnishings and Residential Building Products segments.
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $672.2 million | $711.6 million | -5.5% |
| Net Income | $47.5 million | $37.8 million | +25.8% |
| Earnings per Share (EPS) | $0.98 | $0.80 | +22.5% |
| Gross Profit | $278.8 million | $285.3 million | -2.3% |
| Operating Income | $68.9 million | $56.8 million | +21.3% |
Segment Performance
The Workplace Furnishings segment generated net sales of $505.1 million in Q3 2024, down 5.9% from $536.8 million in Q3 2023. However, operating income for this segment improved to $57.7 million, a 22.1% increase from $47.3 million in the previous year.
The Residential Building Products segment reported net sales of $167.1 million, down 4.4% from $174.8 million. Operating income also decreased slightly to $29.9 million from $30.9 million, reflecting the impacts of a soft housing market.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) | Q3 2024 Operating Income | Q3 2023 Operating Income | Change (%) |
|---|---|---|---|---|---|---|
| Workplace Furnishings | $505.1 million | $536.8 million | -5.9% | $57.7 million | $47.3 million | +22.1% |
| Residential Building Products | $167.1 million | $174.8 million | -4.4% | $29.9 million | $30.9 million | -3.1% |
Acquisitions and Divestitures
In June 2023, HNI Corporation completed the acquisition of Kimball International, significantly expanding its market reach. As a result of this acquisition, HNI's sales increased by $228 million in the first nine months of 2024. Conversely, the divestiture of Poppin, completed in September 2023, resulted in a loss of $11.1 million in sales for the same period.
Balance Sheet Highlights
As of September 28, 2024, HNI Corporation reported total assets of $1.913 billion, with total liabilities amounting to $1.066 billion. The company maintains a strong liquidity position, with cash and cash equivalents of $34.3 million and total debt of $345.4 million.
| Balance Sheet Item | As of September 28, 2024 | As of December 30, 2023 |
|---|---|---|
| Total Assets | $1.913 billion | $1.929 billion |
| Total Liabilities | $1.066 billion | $1.109 billion |
| Cash and Cash Equivalents | $34.3 million | $28.9 million |
| Total Debt | $345.4 million | $435.8 million |
Market Position and Outlook
HNI Corporation continues to strengthen its market position through strategic acquisitions and operational improvements. With the integration of Kimball International and the divestiture of non-core assets, HNI is poised for future growth in both the workplace furnishings and residential building products markets.
A Who Owns HNI Corporation (HNI)
Major Shareholders
As of 2024, HNI Corporation's ownership is comprised of a variety of institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Type of Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 10.5% | Institutional |
| BlackRock, Inc. | 9.8% | Institutional |
| SSgA Funds Management, Inc. | 7.2% | Institutional |
| Dimensional Fund Advisors LP | 6.1% | Institutional |
| Wellington Management Group LLP | 5.5% | Institutional |
| Individual Investors (Top 10 Combined) | 15.0% | Individual |
Institutional Ownership
Institutional investors hold a significant portion of HNI Corporation's shares. As of 2024, approximately 60% of HNI's shares are owned by institutional investors. This reflects a growing trend among institutional investors in the furnishings and building products sectors.
Insider Ownership
Insider ownership provides insights into the confidence that executives have in their company. As of 2024, HNI Corporation executives and board members collectively own approximately 4.5% of the company's shares. This includes:
- CEO: $1.2 million in shares
- CFO: $0.8 million in shares
- Board Members: $2.1 million in shares collectively
Stock Performance and Market Trends
HNI Corporation's stock has shown resilience in the market. The stock price as of the end of Q3 2024 was approximately $46.48, reflecting a 25% increase from the previous year. This growth is attributed to strategic acquisitions, including the acquisition of Kimball International, which has expanded HNI's market reach.
Recent Changes in Ownership
In 2023, HNI Corporation executed a significant acquisition, purchasing Kimball International, which resulted in changes to its shareholder structure. The acquisition involved the issuance of 4.7 million shares, impacting the existing ownership distribution.
Dividends and Shareholder Returns
HNI Corporation has maintained a consistent dividend policy, with dividends declared at $0.98 per share in 2024, which represents a slight increase from $0.96 in 2023. This commitment to returning value to shareholders is indicative of the company's financial health and strategic focus on sustaining shareholder value.
Conclusion
The ownership structure of HNI Corporation reflects a mix of institutional and individual investors, bolstered by significant insider ownership, indicating strong confidence in the company's future. The strategic acquisitions and consistent dividend payments further enhance its attractiveness as an investment.
HNI Corporation (HNI) Mission Statement
Mission Statement Overview
The mission of HNI Corporation is to provide innovative, high-quality products and services that enhance the workplace and home environments. HNI aims to create effortless winning experiences for its customers through continuous improvement and a commitment to operational excellence. This mission is supported by a dedication to sustainability and community engagement.
Financial Performance
As of the third quarter of 2024, HNI Corporation reported consolidated net sales of $672.2 million, representing a decrease of 5.5% compared to $711.6 million in the third quarter of 2023. The decrease is attributed to a 5.9% decline in the workplace furnishings segment and a 4.4% decrease in the residential building products segment.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $672.2 million | $711.6 million | -5.5% |
| Cost of Sales | $393.4 million | $426.3 million | -7.7% |
| Gross Profit | $278.8 million | $285.3 million | -2.3% |
| Net Income | $47.5 million | $37.8 million | +25.8% |
Segment Performance
The workplace furnishings segment generated net sales of $505.1 million in Q3 2024, a decline of 5.9% from $536.8 million in Q3 2023. Conversely, the residential building products segment reported net sales of $167.1 million, down 4.4% from $174.8 million in the same quarter last year.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) |
|---|---|---|---|
| Workplace Furnishings | $505.1 million | $536.8 million | -5.9% |
| Residential Building Products | $167.1 million | $174.8 million | -4.4% |
Net Income and Earnings Per Share
For the third quarter of 2024, HNI Corporation reported net income attributable to the Corporation of $47.5 million, or $0.98 per diluted share, compared to net income of $37.8 million, or $0.80 per diluted share in Q3 2023. This represents a significant increase in profitability.
| Measure | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income | $47.5 million | $37.8 million | +25.8% |
| Earnings Per Share (Diluted) | $0.98 | $0.80 | +22.5% |
Operational Highlights
HNI Corporation's operational efficiency improved, with operating income increasing to $68.9 million in Q3 2024 from $56.8 million in Q3 2023, marking an increase of 21.3%. The operating margin as a percentage of net sales also improved, reflecting enhanced productivity and cost management.
| Operational Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Operating Income | $68.9 million | $56.8 million | +21.3% |
| Operating Margin (%) | 10.2% | 8.0% | +220 bps |
Dividend Information
HNI Corporation declared a quarterly cash dividend of $0.33 per share during Q3 2024, which reflects a commitment to returning value to shareholders. This is an increase from the $0.32 dividend declared in Q3 2023.
| Dividend Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Cash Dividend per Share | $0.33 | $0.32 |
Conclusion of Financial Overview
The financial results for HNI Corporation in 2024 reflect a complex interplay of challenges and opportunities across its segments, with a notable focus on enhancing operational productivity and maintaining shareholder value through dividends and strategic initiatives.
How HNI Corporation (HNI) Works
Business Segments
HNI Corporation operates primarily through two segments: Workplace Furnishings and Residential Building Products. The Workplace Furnishings segment includes products designed for office environments, while the Residential Building Products segment focuses on products used in residential construction and remodeling.
Financial Performance
For the third quarter of 2024, HNI Corporation reported consolidated net sales of $672.2 million, reflecting a 5.5% decrease compared to $711.6 million in the same quarter of 2023. The decline was attributed to lower sales volumes in both segments and the divestiture of Poppin, which reduced sales by $7.7 million.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $672.2 million | $711.6 million | -5.5% |
| Gross Profit | $278.8 million | $285.3 million | -2.3% |
| Operating Income | $68.9 million | $56.8 million | 21.3% |
| Net Income | $47.5 million | $37.8 million | 25.8% |
For the first nine months of 2024, net sales increased to $1.8839 billion, a 7.4% increase from $1.7542 billion in 2023. This growth was driven by the acquisition of Kimball International, contributing $228.0 million to net sales.
Segment Performance
Workplace Furnishings
The Workplace Furnishings segment recorded net sales of $505.1 million in Q3 2024, down 5.9% from $536.8 million in Q3 2023. For the first nine months, net sales increased 14.1% to $1.4251 billion.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $505.1 million | $536.8 million | -5.9% |
| Operating Income | $57.7 million | $47.3 million | 22.1% |
Residential Building Products
The Residential Building Products segment reported net sales of $167.1 million for Q3 2024, down 4.4% from $174.8 million in Q3 2023. For the first nine months, net sales decreased 9.1% to $458.8 million.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $167.1 million | $174.8 million | -4.4% |
| Operating Income | $29.9 million | $30.9 million | -3.1% |
Cost Structure and Profitability
HNI Corporation's gross profit margin for Q3 2024 was 41.5%, up 140 basis points from 40.1% in Q3 2023. Selling and administrative expenses decreased to $208.4 million, representing a 6.7% decrease from $223.3 million in the previous year.
Debt and Liquidity
As of September 28, 2024, HNI had total assets of $1.9134 billion and total liabilities of $1.0664 billion. The corporation maintained a revolving credit facility with $425 million of borrowing capacity, of which $46 million was outstanding. Total long-term debt was $294.5 million.
| Metric | Value |
|---|---|
| Total Assets | $1.9134 billion |
| Total Liabilities | $1.0664 billion |
| Revolving Credit Facility | $425 million |
| Outstanding Borrowings | $46 million |
| Total Long-Term Debt | $294.5 million |
Cash Flow and Investment
Operating cash flows for the first nine months of 2024 were $175.5 million, compared to $162.5 million in the same period of 2023. Capital expenditures for the first nine months were $43.2 million, down from $62.8 million in the prior year.
Dividends and Share Repurchase
During the first nine months of 2024, HNI Corporation declared cash dividends of $0.98 per share and repurchased 0.5 million shares at an average price of $46.48.
How HNI Corporation (HNI) Makes Money
Revenue Segments
HNI Corporation operates primarily through two segments: Workplace Furnishings and Residential Building Products. As of 2024, the financial performance of these segments shows varying trends.
| Segment | Q3 2024 Net Sales | Q3 2023 Net Sales | Change (%) | YTD 2024 Net Sales | YTD 2023 Net Sales | Change (%) |
|---|---|---|---|---|---|---|
| Workplace Furnishings | $505.1 million | $536.8 million | (5.9%) | $1,425.1 million | $1,249.5 million | 14.1% |
| Residential Building Products | $167.1 million | $174.8 million | (4.4%) | $458.8 million | $504.7 million | (9.1%) |
Financial Performance Overview
For the third quarter of 2024, HNI Corporation reported consolidated net sales of $672.2 million, reflecting a decrease of 5.5% compared to $711.6 million in the prior-year quarter. This decline was primarily due to reduced sales in both major segments and the impact of the divestiture of Poppin, which decreased sales by $7.7 million year-over-year.
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $672.2 million | $711.6 million | (5.5%) |
| Net Income | $47.5 million | $37.8 million | 25.8% |
| Gross Profit | $278.8 million | $285.3 million | (2.3%) |
| Operating Income | $68.9 million | $56.8 million | 21.3% |
Cost Structure
The cost of sales for Q3 2024 was $393.4 million, down from $426.3 million in Q3 2023, indicating a 7.7% decrease. Selling and administrative expenses decreased by 6.7% to $208.4 million from $223.3 million in the prior year.
Operational Efficiency
Operating income for the nine months ended September 28, 2024, was $151.9 million, representing a significant increase of 155% from $59.6 million in the same period of 2023. This improvement was attributed to enhanced net productivity and lower restructuring costs.
| Metric | YTD 2024 | YTD 2023 | Change (%) |
|---|---|---|---|
| Net Income | $101.2 million | $26.5 million | 282% |
| Operating Margin | 8.0% | 3.4% | 470 bps |
Acquisition Impact
The acquisition of Kimball International in June 2023 has had a significant impact on HNI's financials, contributing an additional $228 million in net sales for the first nine months of 2024. However, the divestiture of Poppin also affected the overall sales performance, leading to a decrease of $11.1 million in net sales.
Debt and Financial Position
As of September 28, 2024, HNI Corporation had $46 million outstanding under its $425 million revolving credit facility and $200 million under a term loan. The total debt amounted to $345.4 million, with an effective interest expense of $22.1 million for the nine months.
| Debt Type | Outstanding Amount | Interest Rate |
|---|---|---|
| Revolving Credit Facility | $46 million | Variable |
| Term Loan | $200 million | Variable |
| Total Debt | $345.4 million | N/A |
Cash Flow and Capital Expenditures
Operating cash flows for the first nine months of 2024 were $175.5 million, compared to $162.5 million in the same period of 2023. Capital expenditures for the same period were $43.2 million, down from $62.8 million in 2023, with a projected annual expenditure of $60 to $70 million for 2024.
| Cash Flow Metric | YTD 2024 | YTD 2023 |
|---|---|---|
| Operating Cash Flow | $175.5 million | $162.5 million |
| Capital Expenditures | $43.2 million | $62.8 million |
Dividend and Shareholder Returns
HNI Corporation declared cash dividends of $0.98 per share for the nine months ending September 28, 2024, compared to $0.96 per share in the same period of 2023. The company repurchased 0.5 million shares at an average price of $46.48 during the same period.
| Dividend Metric | YTD 2024 | YTD 2023 |
|---|---|---|
| Dividends per Share | $0.98 | $0.96 |
| Shares Repurchased | 0.5 million | N/A |
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Article updated on 8 Nov 2024
Resources:
- HNI Corporation (HNI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of HNI Corporation (HNI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View HNI Corporation (HNI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.